tv Nightly Business Report PBS May 26, 2015 1:00am-1:31am PDT
this is "nightly business" with tyler mathise >> good evening, everyone and welcome to a special memorial day edition of "nightly business here. >> and i'm tyler mathisen welcome. memorial day, the day we honor the men and women who serve this country, also the unofficial start to summer a time when you plan the get away secure that summer job, enjoy a movie, maybe have a barbecue. whatever your plans are, you can bet on spending some money. and tonight we take a look at some of the things that impact the economy and . >> but we begin with the markets, with stocks sitting at or near all-time highs, it's a good time to examine the factors that could fuel or derail the rally. dominic chu takes a look at whether the bears or the bulls
will be in control on wall street o the next few months. >> it's that time of year again when we dust off the barbecue grills and get the beach chairs out. and for many traders and investors, means another look at the old market saying sell in may and go away. anecdotally some in the market believe the summer months produce rockier swings for stocks. this strategy has produced mixed results at best over the years. according to market analytics firm over the last decade the s&p 500 has actually posted a nearly 1% gain between memorial day and labor day. it's been positive 60% of the time. but over the last 20 years performance has been just about flat and it's positive 55% of the time. this year some experts think thers to stay invested in the stock market. >> remember we had an unusually cold winter across the east coast and several factors which temporarily depressed economic
growth in the first three months of the year. as we head into the summer months we're actually expecting economic growth to rebound. you're seeing a lot of pent-up demand all of this spending wasn't necessarily cancelled, it was simply delayed. and as you start to see economic growth rebounding in the second quarter and into the third quarter, i think you want to be exposed, you want to be in the markets in may rather than cut back on your positions. >> of course for all the positive factors, there are risks, as well and a number of them could take stocks down from their near record levels which provides another reason to be more cautious. >> clearly, things such as the greece situation that will cause anxiety, especially with european markets up very strong. if the fed were to take action this summer i think it's been well telegraphed, but again create some anxiety and the reality of the summer is just less volume creates more volatility as traders take parts
of august off. >> for some a summer vacation from worrying about their portfolios may provide peace of mind. for others it amounts to timing the market and being an active trader. regardless it may be a good time to either chat with a trusted financial adviser or take a closer look at just the type of investor you really are. for "nightly business rep i'm dominic chu. >> let's turn now to our two market pros for their views about the summer and your investments. jack mcintyre, mixed income portfolio investor and jeff chief investment strategist at fifth third bank. jack let me begin by asking you about bonds and interest rates. it appears we're not going to get any interest rate hikes until later in the year but already yields on the ten-year treasury security have gone up quit over the past couple of months. do you think that rise is coming closer to an end and taken bonds to a point they might be attractive again? >> yeah i can talk my book
because we have actually recently added some treasury to our portfolios for that same rationale. i think treasury yields have gotten ahead of the underlying economy. there's an expectation the economy is going to shrug off q1 and rebound into q2 q3 and certainly what treasury markets are discounting, so i do think treasuries offer a little bit of value in here. >> jeff, wha the equit market what's going to be the main driver? jack kind of outlined what's going to affect the bond market but that makes it a more complicated environment, does it not, for the equity side of things? >> it does and it doesn't. i think we are back to that old environment where a lot of growth can be bad for the bond market but is good for the stock market and weaker but still positive growth still works for stocks and then would also work for bonds. so in that kind of environment i think the stock market has a pretty good summer ahead.
>> how about let's go back to ac you, jack and talk about corners of the bond market that still feel a little a risky to you and what you know bonds have been kind of a layup for a lot of the last 30 years, basically. and now it seems like the environment may be clanging just a bit. how do you position your portfolio in light of what you see going into to a couple of quick points so you're right, it's been a good environment for bonds over the last decades. we've had a decade that's going to secular deflation, disinflationary environment. i'm not sure that's changing from that standpoint so we're global bond managers we like to avoid bonds that don't have enough inflation expectations getting priced into those so that takes me to core europe. french oats you know europe euro zone in particular has a tail wind in terms of some things that are positively influencing their growth.
maybe dragy is going to be successful so we are avoiding those bond markets. >> jeff you said the stock market may be setting up for a decent summer. where would you put capital to work? >> right now if you look at our portfolios we're overweight in health care overweight in consumer discretionary and we're more neutral, slightly underweight in the oth sectors. so that's where we're seeing this opportunity and also financial, as i should add. we think a very good time to be t there and that's a play for either a steeping yield curve or fed rake hikes, benefits particularly banks would be beneficial and we'll see that this summer. >> jack are you at all concerned that interest rates in the united states which may well start to go up later this year into 2016 are they going to deraie bond market derail bond fund share prices or will the increases be relatively gradual and relatively minor? >> yeah yeah the latter point, everybody kind of talks about when is the fed going to do this
sort of what we call liftoff, i think the more important question is what is the pace of rate hikes going to look like? i think they are going to err on the side of going slow. one thing i really want to drive home to your viewers is just don't focus on what the fed is doing. we're in an environment where global monetary policy is becoming more stimulative. look china is doing. the backdrop for monetary stimulus globally is still going to be extremely accommodative. >> gentlemen, thank you very much, appreciate help. jack mcintyre and jeff corzenick. >> thank you. >> now to the economy on the unemployment rate which is still in the double digits for teens. summer jobs aren't as plentiful as they once were and can have long-term consequences for young people trying to break into the working world. mary thompson has more on a program aimed at getting high school students on the right employment track. she says verizon's operations center basking ridge, new
jersey. >> repor before shadowing workers, cartoon shapes 17-year-old's view of white collar work. >> you see people working in cubicles and they are wearing a white shirt, black tie, and they are just -- they look stressed out about work. >> reporter: instead at the accounting firm he gauged in enthusiastic workers, changing his mind about the kind of job he wants. >> a job in the corporate world, a nice paying job with friendly people a job you like. >> reporter: he is a junior at brooklyn's james madison's high he's part of a program designed by the national academy foundation or n.a.f. a partnership connecting businesses and public school. n.a.f.'s president j.d. hoye says the program's aim is to show how classrooms connect to the working world, done through special lessons, shadowing sessions and internships. >> for us it is really the
ultimate experience that makes education make sense. >> reporter: this summer some of the more than 50 interns will work here at the verizon's operations center applying what they learned in math and science classes to some of these products. they'll test a phone's durability in the company's tumbler and monitor the network's quality in its audio booth. experiences verizon's nikki palmer hopes may turn them on to a future in a field that's desperately in need of talent. >> we can get students at the age where, you know they are still thinking well maybe i want to be an engineer or maybe i don't. >> reporter: even if they learn they don't want to be an engi the teens get the critical skills a first job survives. >> i learned time management skills i learned to be open with people. >> reporter: james madison senior michael kraser learned last summer where he managed inventory on excel files he created, lessons that translate into life long benefits for any
teen who lands a summer job. >> we've seen some surveys that have shown teens who don't have those soft skills or haven't been used to having good work habits typically have more difficult time getting a job later on. >> reporter: putting teens to work, one way r our workforce. baski ridge, new jersey mary thompson for "nightly busine" hiring our heros, that's what many companies and organizations are doing to help the men and women who have served this country transition from the battlefield back to the workplace. hampton pearson has more on this memorial day. >> this is my first search right here. >> reporter: robert lee jr.'s 24-year navy career ends in two months. he's about to become a civilian and he's looking for a job. >> i'm just throwing some feelers out to try to find out what's out there and see what may be a good fit for me. >> reporter: he's among the estimated 250,000 service members leaving the military each year a trend the defense
department says will continue for the next five years. middle-aged vets in particular many of whom fought wars in iraq and afghanistan are coming home and struggling to match their military skills to the civilian workplace. >> if you look around this room the competition is stiff. i mean everyone here is looking for a job and we're kind of stacked up against one another. >> reporter: at this baltimore tech expo dominated by defense industry and high-tech employers looking to sell hundreds of good paying jobs bruce benedict helps veterans seeking jobs maneuver in the civilian battlefield. >> mos of the times when a recruiter asks what do you want to do what job are you applying for, the answer vet's perspectiv is i can do anything you want which was a good answer in the service, but in the civilian workforce, it's not that good. you have to kind of focus your career. >> reporter: business and government efforts to boost veteran hiring are making progress bringing the
unemployment rate for the more than 3 million post-9/11 veterans down from a 12.1% high in 2011 to 7.2% last year. walmart is among the major corporations stepping up its veterans hiring effort. more than 90,000 vets have been hired in the last two years. this week the nation's largest retailer pledged to hire 250,000 more veterans in the next five years. >> we want these folks that are essentially a part of what we argue is the largest talent rich diverse pool in the world, that we call the military community twenty sis to join our team and make us better. >> reporter: memorial day has always been a time to honor the sacrifice of all those who have served. now there's a new mission, helping the next generation of veterans find a place in the civilian economy. for "nightly business rep. coming up -- will prices at
the pump stay low for your summer getaway? that's ahead. first, some of today's business leaders share their wisdom w >> we believe that a company that has values and acts on them can real and an individua that can be you. that must be you you want to have meaning in your work! you want to work for companies that value all stakeholders not just share holders concerned with earnings per share, but every employee every customer every part of our community and even our environment, all of these things are the stakeholders that are critical to the.
>> the summer travel season starting out with a bang. experts predict this could be one of the busiest summers ever for drivers and fliers. phil leb. >> reporter: relaxing in the sun may be your goal this summer but before that happens, be prepared for the headache that come with packed highways and full flights. >> we think that people should be prepared they'll have a lot of company when they are out on the roads. over some holidays we've seen in the past year or so upwards of 10%, 14% of the entire population is on the move. >> reporter: increasingly vacationers will be taking time off by taking off. the airline industry expects an all-time record of 222 million people ty som by the end of august so a few more flights are being added to meet demand but the vast majority of americans will be in their car driving to their vacation spots. while prices at the pump have rebounded in the last month and
may trend higher this summer, the avert now is still well under $3 a gallon. >> gasoline prices being lower, a lot of people have bought new vehicles they want to get out on the road. >> reporter: the busier summer travel season is being driven by the healthy economy, low unemployment and moderate gas prices. so for many americans, it makes sense to spend more time and money getting away. >> yes, i am planning on traveling, and because i love to travel. >> like spending more just so to get out of idaho and see the back country. >> reporter: so when you load your bags this summer remember to pack lots of sun block and plenty of patience for the crowds you'll deal with on the road. phil leb. if you drove to your destination this week you probably appreciated the few bucks you saved at the pump this year getting around by car is cheaper now, but will low gas prices hold for the summer months? jackie de angeles takes a look.
>> reporter: the summer driving season is on and aaa says that more than 37 million americans will have hit the road this while prices are a little less than a dollar cheaper than last year at this time, they still surged ahead of the holiday and are likely to climb all the way until july 4th. >> come out of their maintenance schedules, runni o almo 94%, 95% of capacity and gasoline market is very well supplied at this time so i don't ink you'll see prices rise say, 10 to 15 cents more than where they are right now, unless you see some major refinery problems going into the july 4th weekend. >> reporter: the average price of gas is a helpful barometer, but keep in mind that certain states have seen more dramatic increases because of regional production problems and refinery issues that's according to aaa. west coast and mid western drivers, they fe mor pain as a result. also remember part of what happens to gasoline happens to
crude prices. part of the jump at the pump has been at the rise of crude oil prices over the last month or so. >> i don't see crude oil trading above $70 for the summer because we are still a very well supplied market. so the consumer really shouldn't fret about that translating into higher gasoline prices. >> reporter: but as always there are wild cards. changes to the crude supply/demand balance, geopolitical iss c the trend in an instant. for "nightly business rep i'm jackie de angeles. >> and one factor that has a big impact is production in saudi arabia. and while the u.s. has surpassed that cntry as the world's biggest producer of oil, soon the saudis will hold the top spot in another competition. hadley gamble takes us behind the scenes as developers race to build what's slated to be the world's tallest . ♪ >> reporter: just north of jetta
on the red sea on the western edge of saudi arabia the world's tallest building is under construction. set to top 3,300 feet, kingdom tower will soar above the skyline, setting a new standard for the 21st century skyscraper. but building the tallest structure on the planet is just the first step. billionaire saudi businessman has bigger plans for the site pouring $20 billion into the project to develop a multiuse economic city just minutes from downtown a city he hopes will lure foreign investors and create the jobs that saudi arabia needs. how involved is the prince? this is hichild, isn't it? >> he follows daily the news of the project on his iphone. >> reporter: how important was his vision to making this happen? >> to make the young saudis very proud to live and work here. >> reporter: on site an international team of advisers
consultants, aengnd engineers are using the tallest cranes on the world and toughest cement on the planet for the oe five-star hotel place. >> i challenge anyone to say they've worked on something as massive as this before. we have collective experience here working on the project. they've all worked at least 15 years experience in high-rise buildings, yete a sit in the meeting room never a dull moment. everyt is a challenge. >> reporter: two double deck high speed shuttle elevators, the fastest in the world moving at 41 feet per second will take you from top to bottom in a minute and a half max. unlike its cousin in dubai, kingdom tower must be built to withstand three separate weather systems, meaning support piles yild by the most dense mesh of steel ever built, 345 feet below its base. while it looks like i'm on the base level of what will be kingdom tower, the tallest tower
in the world, they actually had to drill 30 floors beneath me just to get the foundation. >> the economic social environment today is the perfect situation, perfect timing for a project of this magnitude. >> reporter: set for completion some time in 2018 kingdom tower could hold as many as 3,500 people. for "nightly business rep up next will the price of fall off the bone ribs at your summer barbecue make you fall off your chair? jane wells has the cost of your weekend cookout. first, more commencement remarks from top business leaders. >> stay humble and optimistic. and solving problems i learned a long time ago that no job is beneath me. in 1989 i was leader of clients service business we had a catastrophic failure of our refrigerators and were required to replace 3 million compressors. despite my lofty title, i learned how to fix compressors.
i would go into people's homes to fix compressors so i understood the problem. there's to better way to be humbled than for a math major to sit on someone's kitchen floor while the ice cream melts. >> so i'm asked one question most often, why didn't you sell your business? it doesn't even make money, it's a fad. you could be on a boat right now. everybody loves boats. what is wrong with you? and i'm now convinced the fastest way to figure out if you're doing something that is truly important to you is to find someone who will offer you a bunch of money to par. here's what to watch tomorrow. e orders is set for release. new home sales will also be closely watched. and to top off all tt economic data consumer confidence that's what's on the agenda for tuesday. memorial day weekend also the official start of summer blockbuster season.
usually the most profitable time of the year for movie studios, billions expected in ticket sales. here's a look at what hits hollywood is betti on. >> i already know what scares you. >> reporter: poltergeist debuting this holiday weekend, a new take on the '80s horror franchise and warner bros. reviving mad max last weekend. universal's jurassic world out june 12th 14 years after jurassic park 3. and terminator genesis, six years after the last one. >> you get these long gaps and big characters kind of making it back to the big screen. >> reporter: a slew of other sequels, from ted 2, to mission impossib: rogue, to animated minions in the works plus tv show's entourage and pixar's first film since 2013.
the box office is on track for a record summer. it could gross as much as $5 billion between may 1st and labor day, says analyst, and that's just here in the u.s. hollywood is increasingly looking to sequels in established brands since they tend to perform better overseas. international box office growth is revving up driven by new markets another audience studios are paying more attention to is women. as pitch perfect 2's record breaking opening weekend is teg their buying power. >> unusual number of movies we've seen chasing the female demoe big budgets. again, the studios figured out women go to the movies too. >> i have a little treat for y'all tonight. >> rep coming up a slew of films targeting women, including magic mike xxl and two that put female comedians front and center. train wreck starring amy schumer and spy with melissa mccarthy.
for "nightly business rep" in los angeles. finally tonight, if you plan on having lots of barbecues this summer indejegs isn't the only thing you're going to be suffering from. be prepared for sticker shock too. jane wells explains. >> reporter: holy cow, have you noticed beef prices? memorial day kicks off the summer barbecue season and for many who've suffered through a harsh winter -- grilling is good. >> yeah beef. >> reporter: but this holiday you may find yourself eating more bun than burger. beef prices remain high. in the last month what have you seen with prices? >> skyrocketing. i mean, ther >> reporter: america's cattle ranchers are still replenishing herds after cutting back after droughts in texas and the midwest. ground beef prices are up 14% in
the year steak prices up nearly 20%. >> this is like the top quality as far as meat goes. >> reporter: in burbank, california the store competes by kee margins as thin as a butcher's blade. >> every week we have to re-evaluate our prices we have to do cutting tests to make sure we're right in line. >> reporter: consumers may not just have a beef with beef avian flu is causing chicken prices to fly high while breast meat prices are relatively flat wings are up 33%. >> i think it's just pretty much going along with what the economy is right now. >> reporter: which is why john hincy is planning on pork this. pork prices are leaner after the hog industry bounced back from its own virus last year. so when will beef prices become more affordable? >> i think they are going to stabilize right now. i mean they can't seem to go much higher because what's going to happen is people are going to like gasoline when gasoline goes way up people quit driving so much then you have too much and then the
prices start coming down and stuff. >> reporter: they don't go all the way down. >> no they'll never go back down. >> reporter: maybe next memorial day you could have more c burger in your bun. for "nightly business rep and that does it. thanks for watching this special edition of "nightly business i' sue herera. >> put ol for both of us. i'm tyler mathisen thanks for watching. enjoy the rest of your holiday weeken ♪ ♪